Abbreviated accounts balance sheet

Abbreviated accounts balance sheet

Didn't find your answer?

Hi, wonder if anyone can help me.

I want to submit my own abbreviated accounts, but I am stuck.  I have adjusted the P&L for depreciation, but now of course the balance sheet doesn't balance.  How do I make it balance?

Thank you to anyone who can help

Replies (40)

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By SJRUK
11th Feb 2014 10:55

??

It should balance if you 've done the journal correctly.  Have you reduced the fixed assets by the depreciation amount?

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Replying to DonDan:
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By Chewienuts
11th Feb 2014 10:58

Thanks for your response .Yes, I've reduced the fixed assets.  And on the P&L I reduced the amount of the loss by adding back in the annual charge.  Is this correct?

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Stepurhan
By stepurhan
11th Feb 2014 11:07

This is why professionals exist

You want to submit your own abbreviated accounts, but you are stuck because you don't understand the difference between accounts adjustments and tax adjustments.

To answer your immediate question, no you are not correct. You only add back the depreciation for the tax computation, not for the accounts themselves.

There may be other problems with your accounts you haven't even thought to ask about. Even if the correction above makes your balance sheet balance, that doesn't mean it is right. I have seen examples where figures have simply been agreed to themselves, such as a loan that appears as both debtor and creditor. You would be well advised to get professional help with this.

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By SJRUK
11th Feb 2014 11:09

The P&L figure is the one

The P&L figure is the one that includes the depreciation, not the figure adjusted for tax purposes.

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Replying to Portia Nina Levin:
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By Chewienuts
11th Feb 2014 11:13

Thank you. Your help is much appreciated.

Kind regards

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By Chewienuts
11th Feb 2014 11:12

Thank you.  Originally I had

Thank you.  Originally I had not adjusted the P&L, but was told by an accountant that I should (he had seen the accounts and I was asking him to check).  Won't be asking him to check again!  Everything else is fine with the accounts.

Thank you again for your help.

Kind regards

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By johngroganjga
11th Feb 2014 11:17

If you don't understand double entry you shouldn't be doing your own accounts.

You need an accountant urgently. 

You say you have adjusted your P& L depreciation but then that you have reduced the loss by "adding back in the annual charge".  The last part of what you have done is completely misconceived and is most certainly not correct.  You may balance if you simply reverse that error.

The other concern is that you say you are submitting your abbreviated accounts, but you don't mention the full accounts that you must, or should, already have prepared.  Preparation of the full accounts is not an optional extra - it is a legal requirement under the Companies Act and apart from that you will need them to submit to HMRC with the company's tax return.  The optional extra is the abbreviated accounts that you may be entitled to file at Companies House, but which serve no other purpose.  

 

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Replying to dhughes1975:
Red Leader
By Red Leader
11th Feb 2014 11:26

iXBRL and CT600

How will you create the iXBRL version of the full accounts?

How are you getting on with the CT600?

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Replying to dhughes1975:
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By Chewienuts
11th Feb 2014 11:28

Thank you.  I understand

Thank you.  I understand double entry. And I know the rest per your message - I was not asking about any of that. I was thrown by the advice from an accountant. Whilst I think it's great that you are prepared to answer a question, no matter how simple, I don't think you really need to use the tone.  I am not thick or stupid as your message is implying.

Thanks again for your response.

Kind regards

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Replying to User deleted:
Stepurhan
By stepurhan
11th Feb 2014 11:43

Not really understanding

Chewienuts wrote:
I understand double entry.
The reason your balance sheet does not balance, is because you effectively have a single sided double-entry (adding back depreciation in the P & L whilst still including the adjustment in assets). If you really don't understand that, you do not understand double entry.

You say you are being called thick and stupid as if that is a general assessment. It is merely being pointed out that you clearly have no idea what you are doing when it comes to accounts and tax returns. You may be generally quite smart, or particularly well-informed in some other area, but that doesn't change the fact that, based on your postings here, your accounts knowledge sucks. Take the advice you have been given and get professional help from someone that does understand this area. Plough on regardless, taking offense at having your lack of knowledge of this area being pointed out, and you will only have yourself to blame when things go wrong and you get HMRC on your tail.

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By johngroganjga
11th Feb 2014 11:40

With the greatest possible respect you don't understand double entry because you have announced on this forum that you have put a one sided entry through your accounts and then you don't understand why your accounts don't balance!

I meant no insult to your intelligence.  Lack of knowledge of accounting is not a lack of intelligence.  It is just what it is.  The best advice that an accountant can give when they see someone out of their depth and struggling is that they should get an accountant.  You may not like that advice or want to follow it - which is your prerogative.  But with respect if you want to solicit advice from this forum in future it would be better if you did not impugn the motives of those who honestly offer the best advice they can think of in the circumstances.

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By simontill
11th Feb 2014 12:15

agree with comments

 

Chewienuts wrote

Originally I had not adjusted the P&L, but was told by an accountant that I should (he had seen the accounts and I was asking him to check).  Won't be asking him to check again!  Everything else is fine with the accounts.

 

Accountant advise correct to adjust P&L (and Balance Sheet re double entry)

Accounts Profit and Taxable Profit can vary as will be shown by Computation, OP shows lack of understanding of this

Agree totally with comments from stepurhan and johngroganjga, have read many comments by them on here and they know what they say

Taking professional help in order to complete and file the Company Accounts & Tax Return correctly in an area where you lack expertise is the best way 

 

 

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By DMGbus
11th Feb 2014 13:46

P&L adjustment

I see how the confusion could have possibly arisen.

The profit for tax purposes does have the deprecation charge added back to profit.

This does not directly affect the Balance Sheet (but it changes the provision for Corporation Tax that would affect the P&L figure on the Balance Sheet).

It is possible that either the accountant didn't explain this or you misread what the accountant said.

There is no double entry for adjusting the profits for tax purposes (such as disallowing depreciation as an expense).   

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By David Gordon FCCA
12th Feb 2014 12:15

Peace be with you

 Whoa!!

 Just use the companies house website Abbrve.acs.

 It is easy to use, and file.

 --If you have an agreed trial balance!!

 For a one off full acs you may use the HMRC website format

 I have a colleague who does not use computers. He just uses the HMRC stuff for his small part-time practice.

 Just chew at it one bite at a time.

 

 

 

 

 

 

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By The Black Knight
12th Feb 2014 12:53

oh dear

I suggest you look at the tax penalties for getting these things wrong, makes accountants look very cheap indeed.

Don't worry about the abbreviated accounts companies house don't care if they balance or are otherwise compliant.

"taxation without representation is tyranny"

You will only see what I mean if you get unlucky and get pulled for a look by HMRC.

good luck!

 

P.s. I could write a book on what else you will get wrong. Easy score for HMRC useless as they are.

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By mydoghasfleas
12th Feb 2014 13:11

Sometimes

I wonder if posts like this are put in to spark this sort of reaction.

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Replying to Harrison88:
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By The Black Knight
12th Feb 2014 13:17

Sucked in again then LOL

mydoghasfleas wrote:

I wonder if posts like this are put in to spark this sort of reaction.

You might be right! They do seem to be on the verge of ridiculous so far as knowledge levels are concerned.

 

 

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By David Gordon FCCA
12th Feb 2014 13:14

Oh dear me

 

Dear Black Knight, sometimes I wonder about some of my colleagues who think that Accountants may save the world.

 The questioner clearly knows about accountants, other wise he would not be reading or know how to use this website.

 So, it is his choice.

 Besides I know and I suspect you know, the most aggravating clients are those that half the rules.

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By TOC
12th Feb 2014 14:03

Abbreviated Accounts

Give them to somebody who knows what they are doing. You've messed up a really simple adjustment.

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By ted.henderson
12th Feb 2014 15:42

abbreviated accounts

Hi chewienuts

Have you sorted this out yet?

If not, I am happy to take a look at your figures (pre adjustment and post adjustment) and sort it out, free of  charge.

JEH (FCA)

 

 

 

 

 

 

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By Briar
12th Feb 2014 15:46

How will you be doing the Deferred Tax Provision?

If you are charging depeciation, adding it back in the tax comps and then calculating Capital Allowances (and using the correct rates!), you may well have to make a provision for deferred taxation. Now that is an accountant's invention.

So, as with others, I recommend that you see a good accountant (which does not include the one you met in the pub).

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By TalithaFreedman
12th Feb 2014 16:54

Way to welcome a guy in...

That was his first post. Potentially now his last.

The help and support provided from members on here has proved invaluable time and time again for me personally and I’m truly appreciative towards to members that contribute.

However what happened to ‘if you don’t have anything nice to say, don’t say anything at all’? The third post in advised that a qualified accountant be engaged….

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Replying to SXGuy:
Stepurhan
By stepurhan
13th Feb 2014 08:33

What would be nice?

TalithaFreedman wrote:
However what happened to ‘if you don’t have anything nice to say, don’t say anything at all’? The third post in advised that a qualified accountant be engaged…
So you're saying that someone who clearly doesn't know what they are doing SHOULDN'T be advised to seek help from a professional? If someone with a toothache told you there were going to have a go at sorting it with a fork and a mirror, would you not say you thought that a bad idea and that they should see a dentist? I even later went out of my way to point out that it was only his accounts and tax skills being criticised.

This forum is not a general advice service for business people. It is a forum for accounts and finance professionals. Business people are given help from time to time, but only if they seem capable of understanding the advice given. As has already been said, a little knowledge is a dangerous thing. Giving people a little knowledge they only half understand is doing more harm than good.

Incidentally, I've always found "If you can't say anything nice, don't say anything at all" a hypocritical piece of advice. The only reason to say it is to criticise the actions of others. Since criticising the actions of others is not nice it should, by its own advice, never be said.

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By raybackler
12th Feb 2014 19:26

Double entry bookkeeping

I have come across people with bookkeeping training who don't properly understand fixed assets and depreciation, never mind the reason why transactions are classified within the balance sheet or the profit and loss account.  When depreciation in the accounts is added back in the tax computation and substituted with capital allowances, this takes some explaining to inexperienced bookkeepers.  Those who have a knowledge of the basic arithmetic of double entry can think they have cracked it.  It might seem simple, but it is not.  Many posters on here are only pointing out that a little knowledge is dangerous.  Ignore the advice of those people at your peril.

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By ShirleyM
13th Feb 2014 09:34

We have to give good news, and bad news, at times

We shouldn't shy away from giving good honest advice, even if it isn't what the client wants to hear.

If you can't be honest with someone, then how on earth will their knowledge ever improve? Imagine receiving rubbish bookkeeping from a client, and you have to tell them it's crap (but in a more diplomatic manner).  You would tell them, even though it isn't 'nice', wouldn't you?

It is a similar situation on here, but it is free advice, so we may not be quite as diplomatic as we would with a client who pays. I would be even less diplomatic with a non-accountant who comes on here for free advice, then rejects that advice, because they know better. ;) It does give me a giggle though, so it isn't a complete waste of time. I also give a big sigh of relief that they are not one of my clients.

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Replying to chrisholmes:
Euan's picture
By Euan MacLennan
13th Feb 2014 11:22

Crap

ShirleyM wrote:

Imagine receiving rubbish bookkeeping from a client, and you have to tell them it's crap (but in a more diplomatic manner).  You would tell them, even though it isn't 'nice', wouldn't you?

I have a client just like that.  When he came in to discuss the accounts we had managed to concoct from his "records", I wasn't diplomatic, I just told him that his records were indeed crap.  He agreed, laughed and explained that as his wife would be doing them next year, they would be much improved!

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By TerryD
13th Feb 2014 11:39

Too true

Ah, sexism! Doncha just love it! Nevertheless, Euan, I'd bet a year's salary that he'll be proved correct!

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By The Black Knight
13th Feb 2014 12:41

that much £4.50

£4.50 at that rate I'd bet it's a different sort of do dah.

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Small Dog's RAT Return
By Oldmanwetmix
13th Feb 2014 13:09

Liability

There do seem to be a lot of posts to the forum by DIY non accountants looking for free advice on quite simple matters they don't understand. I've never found a builder who would fix my roof for nothing.

It has mischieviously occured to me that one could deliberately give incorrect advice. What would be the implications of that, lol.

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By raybackler
14th Feb 2014 09:27

Stick to general advice

I never give advice on specific figures on this forum or attempt to give clear opinions where the information given is confusing or incomplete.  Any accountant posting must have one eye on the liability issue.  The best posters on here are clear with their advice and often very detailed.  Those who read this advice need to read all of it and make sure the advice still fits if they know further facts that have not been divulged.  The best advice usually includes consulting a professional, if it is obvious that the original poster doesn't understand the basics.  I can't see anything wrong with this approach.

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By engenius
19th Feb 2014 10:02

Professionalism

 

As a small business owner and operator of 32 years experience who had no option but to learn book-keeping and subsequently more obscure aspects of finance in order to circumvent bent "professionals", I find it distressing that the accountancy profession still thinks it's OK to operate with the level of arrogance displayed above.  The clear message is that charges reflect not the intrinsic value of the work (ie  releasing business effort for profitable work) but the ransom value ("think what it will cost if HMRC catch you out").  I wonder who it is who drives the ever-more complex tax structures we business folk have to tolerate - not us, for sure.  From the outside it looks as though accountancy is busy complicating the tax system to create work.  Should the tax affairs of every business, no matter how small, be so complex that an intelligent owner can't sort it out without help?  Over to you, Mr Cable...

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Stepurhan
By stepurhan
19th Feb 2014 10:09

Carrots and sticks

Sadly it has been demonstrated that sticks are often more effective than carrots in encouraging people to do things. Fear of hurt (if you don't do this, bad things will happen) is just more powerful than anticipation of gain (if you do do this, good things will happen) in the human psyche.

So whilst accountants may wave the stick of HMRC enquiry, they would much prefer to wave the carrot of tax savings from efficient planning and full claims. Most accountants will end up saving more than their fees in handling tax properly.

As for accountants wanting to complicate the tax system, you're having a laugh. Increasing complications drive many people out of the profession. Fear of being sued for forgetting some obscure rule is a major concern when the rules get over-complicated.

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By TerryD
19th Feb 2014 10:45

Dear engenius,

While I don't deny that there are a few bad apples in the accountants' barrel (as there are with every other business and profession), we are, as members of professional bodies, bound by strict ethical standards and we go to great pains to ensure that we comply with them. Moreover, our fees are, in 99% of cases, determined purely by the amount of time it takes to do the job. Tax laws would not be so complex if there weren't so many "bent" (to use your terminology) taxpayers determined to circumvent the system in order to avoid paying their fair share. As stated above, accountants would love the law to be simple. Finally, I find your description of accountants as "bent" not only personally insulting (as a contributor to this and other threads) but defamatory and potentially libellous - please retract it forthwith.

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Replying to lionofludesch:
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By engenius
26th Feb 2014 13:17

Professionalism

If you would like to read the words rather than jump to conclusions, you will see that I was referring to specific individuals (one of whom has subsequently been jailed) and not to the profession.  Methinks thou dost protest too much...

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By User deleted
19th Feb 2014 12:41

I agree Terry D

As a professional, and a member of two Institutes, I am affronted by the statement that we are bent, work things to our advantage etc.,  I would like that poster to spend just half a day with one of us to see how hard we work and how much we do without charge.  Just a small example from earlier today.  I have a client who is undergoing chemo, and is director of two companies.  One company has not paid £1309.60 Corporation Tax, due on 1st January, due to my client being ill and not able to chase outstanding payments.  I contacted HMRC today and negotiated a time to pay, setting up a direct debit with the Limited Company bank details to ensure the debt is paid regardless of the outcome of the treatment.  My very longstanding client is likely to die in the very near future and I, for one, am not prepared to cash in on that.  I also know, for a fact, that most of my fellow AWeb members would do exactly the same, so Engenius, live up to your name, and apologise, unreservedly, now.

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Replying to Justin Bryant:
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By The Black Knight
19th Feb 2014 13:14

Don't

Mathswizard wrote:

As a professional, and a member of two Institutes, I am affronted by the statement that we are bent, work things to our advantage etc.,  I would like that poster to spend just half a day with one of us to see how hard we work and how much we do without charge.  Just a small example from earlier today.  I have a client who is undergoing chemo, and is director of two companies.  One company has not paid £1309.60 Corporation Tax, due on 1st January, due to my client being ill and not able to chase outstanding payments.  I contacted HMRC today and negotiated a time to pay, setting up a direct debit with the Limited Company bank details to ensure the debt is paid regardless of the outcome of the treatment.  My very longstanding client is likely to die in the very near future and I, for one, am not prepared to cash in on that.  I also know, for a fact, that most of my fellow AWeb members would do exactly the same, so Engenius, live up to your name, and apologise, unreservedly, now.

Don't have a battle of wits with an unarmed opponent, you will lose every time.

Mr what's his name thinks an accountant is a book keeper. He will never understand.

love to see how much it has cost him.

Although in my experience the hatred of the accountant usually comes from the accountant not being prepared to fiddle the tax and someone has to be blamed for the rules.

Stop press: We don't make the rules neither do we enforce them. Constant change is a pain and we lose.

We do help you stay compliant (avoiding nasty government penalties), We do help you pay the right amount of tax and minimise the effect of this where legally possible. We do save you money.

We cannot save everybody. We can increase your knowledge levels but not your intelligence.

If you buy a rubbish accountant that is your fault (probably because you used ticket price rather than value as a measure).

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By User deleted
19th Feb 2014 17:14

Thank you Black Knight

It is just so frustrating sometimes, I give up loads of my time gaining CPD points, having to travel to seminars etc.,.  I know we all do it, but it is so that we can maintain our professionalism and knowledge for the benefit of ... our clients.  If I was a shelf stacking in my local supermarket, I would not need constant training, show me once then I get on with it.  I know loads of our  clients do appreciate us, and they don't claim to be geniuses either !!!

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By TerryD
26th Feb 2014 13:37

We did read the words

I certainly did read your words, and I'm sure everybody else did too, and nowhere do they refer to specific individuals, but everywhere they infer that professionals (meaning the accountancy profession) are not only bent, but are colluding with government to over-complicate the tax system for their own benefit. I would challenge anybody to read your words and not draw those inferences. However, if you meant something different, then I'd be happy to engage in a discussion on what you really meant. Maybe you've had a bad experience with an accountant in the past (can't say I'm surprised if this is symptomatic of your attitude to professionals trying to do you a service!), but that is no justification for writing such defamatory comments about the profession in general. Go back and re-read your words - you will see that our protests are entirely justified.

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RLI
By lionofludesch
26th Feb 2014 13:55

Eh dear

Can I just remind engenius that the original post was about someone who knew so little about accounts that he couldn't balance his balance sheet ?  Is that too complicated ?

He clearly needed more hands on help than can be provided on a forum and he was - quite rightly - advised to get it.  Who knows what other errors were in the accounts ?

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By David Gordon FCCA
27th Feb 2014 12:27

Tell it how it is

 Soul searching.

 I joined the profession as a snot-nosed clerk in 1961.

 Apart from the machinery used (None when I started- no adding m/c, no copiers, no electric typewriters, no calculators) The basic principles have not changed.

 I tell my clients:- No one hires an accountant because it is the "Cool" thing to do. They hire an accountant for the same reason if they are sensible they twice per annum visit and pay a dentist. A minimum of discomfort on a regular basis is preferable to waiting until the devil has to pull out your teeth with pliers.

The real difference is that back in the days BC (Before Computers) at a cost the client could afford, we did generally have time to work with clients on other non-tax related matters.

 The growth in the business of "Accountancy practice" has been in step with the exponential growth in government legislation. It has nothing to do with the virtue of being a "Professional Qualified Accountant".

Our particular problem is that it is easy and cost free for MPs, HMRC et al, to be rude about us. Being Jewish I may make a simple statement:

If in many of the pronouncements made by MPs, HMRC, and similar great and good, one substituted the words Jew, black, or Muslim, for the words "Accountant" or "Accountancy profession",  then just how "Racist" some of those remarks are would instantly be apparent

 

than

 

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